Open Space / Current Use Information
The Open Space Taxation Act, enacted in 1970, allows property owners to have their open space, farm and agricultural, and timberlands valued at their current use rather than their highest and best use. The Act states that it is in the best interest of the State to maintain, preserve, conserve, and otherwise continue in existence adequate open space lands for the production of food, fiber, and forest crops and to assure the use and enjoyment of natural resources and scenic beauty for the economic and social well-being of the State and its citizens.
What Land Qualify for Classifications
The law provides three classifications:
- Farm and Agricultural Land
- Open Space Land
- Timber Land
Open Space land is defined as either:
- Any land area zoned for open space by a comprehensive land-use plan adopted by city or county legislative authority, or
- Any land area in which the preservation in its present use would:
- Conserve and enhance natural or scenic resources
- Protect streams or water supply
- Promote conservation of soils, wetlands, beaches, or tidal marshes
- Enhance the value to the public of abutting or neighboring parks, forest, wildlife preserves, nature reservations or sanctuaries, or other open space
- Enhance recreation opportunities
- Preserve historic sites
- Preserve visual quality along highway, road, and street corridors or scenic vistas
- Retain in its natural state tracts of land not less than one acre situated in an urban area and open to public use on such conditions as may be reasonably required by the granting authority
- Or, any land meeting the definition of farm and agricultural conservation land which means either:
- Land previously classified under farm and agriculture classification that no longer meets the criteria and is reclassified under open space land
- Traditional Farmland, not classified, that has not been irrevocably devoted to a use inconsistent with agricultural uses, and that has a high potential for returning to commercial agriculture
Farm & Agricultural Land
Farm and Agricultural land is defined as either:
- Any parcel of land that is twenty or more acres or multiple parcels of land that are contiguous and total twenty or more acres
- Devoted primarily to the production of livestock or agricultural commodities for commercial purposes
- Enrolled in a cropland retirement program administered by the United States Department of Agriculture
- Any parcel of land that is five acres or more but less than twenty acres devoted primarily to agricultural uses equivalent to:
- $100 or more per acre per year for three of the five calendar years preceding the date of application for classification made before January 1, 1993
- On or after January 1, 1993, $200 or more per acre per year for three of the five calendar years preceding the date of application for classification
- Any parcel of land of fewer than five acres devoted primarily to agricultural uses which have produced a gross income of:
- $1,000 or more per year for three of the five calendar years preceding the date of application made before January 1, 1993
- On or after January 1, 1993, $1,500 or more per year for three of the five calendar years preceding the date of application for classification
- Farm and agricultural land also includes:
- Incidental uses compatible with agricultural purposes provided such use does not exceed 20% of the classified land
- Land on which appurtenances necessary for production, preparation, or sale of agricultural products exist in conjunction with the land producing such products
- Any non-contiguous parcel of one to five acres, that is an integral part of the farming operations
- Land on which housing for employees and principal place of residence of the farm operation or owner is sited provided the use of the housing or residence is integral to the use of the classified land for agricultural purposes and provided that the classified parcel is twenty or more acres
Timber Land means any parcel of land that is five or more acres or multiple parcels of land that are contiguous and total five or more acres which is or are devoted primarily to the growth and harvest of forest crops for commercial purposes.
Who May Apply
An owner or contract purchaser may apply for current use assessment under the open space law. However, all owners or contract purchasers must sign the application for classification, and any resulting agreement. Application forms are available from the County Assessor's office or the County Planning office.
Applications may be made for classification at any time during the year from January 1st through December 31st. Current use valuation assessment begins on January 1st in the year following the year application was filed.
Where to Apply
Farm and Agricultural land classification is filed with the assessor of the county where the property is located.
Open Space and timberland classification is filed with the county legislative authority. Timberland applications require that a timber management plan also be filed.
The city or county legislative authority may, at their discretion, require a processing fee to accompany each application. Such fee shall be in an amount that reasonably covers the processing cost of the application. The application fee for Grant County is $180.50
The Assessor shall act on each application for classification as farm and agricultural with due regard to all relevant evidence and may approve the application in whole or in part.
Upon application for classification, the Assessor may require applicants to provide data regarding the use of such land, including the productivity of typical crops, sales receipts, federal income tax returns, other related income and expense data, and any other information relevant to the application.
The application shall be considered approved unless the Assessor notifies the applicant in writing before May 1st of the year following the year the application was made.
The Assessor shall record the approval of classification with the County Auditor for public recording and the tax lien on real property.
Appealing Denial of Farm and Agricultural Application
The owner may appeal the Assessor's denial to the Board of Equalization in the county where the property is located. The appeal must be filed with the Board within thirty days after the mailing of the notice of denial.
Open Space Land Applications Acted on by Granting Authority Within 6 Months
Applications for classification or reclassification as open space land are made to the appropriate agency or official called the "Granting Authority". If the open space is located in the county's unincorporated area, the county legislative authority shall be the granting authority on the application. However, if the land is located within a city or town, the application shall be acted upon by a joint county/city legislative authority consisting of three members of the county legislative authority and three members of the city legislative authority.
If a comprehensive plan has been enacted, an application for classification or reclassification shall be processed as a proposed amendment to that plan. If there is no comprehensive land-use plan, a public hearing on the application shall be conducted after notice announcing the hearing is published at least ten days before the hearing.
The Granting Authority shall either approve or reject the application in whole or in part within six months from the receipt of the application. In determining whether an application made for classification or reclassification should be approved or disapproved, the granting authority may consider the benefits to the general welfare of preserving the current use of the property. They may require that certain conditions be met including but not limited to the granting of easements.
If approved, in whole or in part, the granting authority shall, within 5 days of the approval date, send an Open Space Taxation Agreement to the applicant for signature showing the land classification and conditions imposed. The applicant may accept or reject the agreement. If the applicant accepts, he or she must sign and return the agreement to the granting authority within 25 days after the mailing of the agreement.
The granting or denial of the application for classification or reclassification is a legislative determination and shall be reviewable only for arbitrary and capricious actions. An appeal can be made only to the superior court of the county where the application was filed.
Within 10 days of receiving notice from the granting authority of classification of land, the Assessor submits such notice to the County Auditor for recording in the place and manner proved for the public recording of state tax liens on real property.
Current use valuation will begin on January 1st of the year following the year the application was filed. The criteria for classification will continue to apply after classification has been granted.
Open Space Land Public Benefit Rating System
If the county legislative authority has established a public benefit rating system for the Open Space classification, the criteria contained within the rating system shall govern the eligibility of the lands described in each application filed for that classification and the current use valuation of that land.
When a county creates a benefit rating system, all current use applications will be rated under the new system. A parcel that no longer qualifies for classification will not be removed from classification but will be rated according to the rating system.
The owner, within 30 days after receiving notification of the new value established by the public benefit rating system, may request the removal of classification of such parcel without application of the additional tax or penalty.
Timberland Classification Requires Forest Management Plan
Applications for current use timberland classification are made to the county legislative authority. A timber management plan is filed at the time of application or when a sale or transfer of timberland occurs and a notice of continuance is signed.
Classification shall be acted upon after a public hearing in a similar manner to open space land classification within six months following the date the application is received.
Granting or denial of an application is a legislative determination and shall be reviewable only for arbitrary and capricious action. The granting authority may not require the granting of easements for timberland.
The application form requires information about a forest management plan, restocking, fire protection, insect and disease control, weed control, and any other summary of experience and activity that supports the growth and harvest of forest crops for commercial purposes.
Determination of Value
The Assessor is required to maintain two values for each parcel that is classified. The first is the value that would be placed on the land if it was not classified. This is commonly referred to as the "fair market value". The second is the current use land value based on its present use as classified by the granting authority. The process for determining the value of open space lands is spelled out in stature. The Assessor shall consider only the use to which such property is currently applied and shall not consider potential uses of such property.
- Open space land located within a county that has established a public benefit rating system will be valued according to the criteria of the rating system. In absence of a rating system, the valuation will be no less than that for farm and agricultural land.
- In determining the current use value of farm and agricultural land the Assessor shall consider the earning or productive capacity of comparable lands from crops grown most typically in the area-averaged over not less than five years. This earning or productive capacity shall be the "net cash rental" and shall be capitalized by a "rate of interest" charged on long-term loans secured by a mortgage on farm or agricultural land plus a component for property taxes.
- Timberland is valued according to the schedule prepared by the Department of Revenue for the Timber Tax law, Chapter 84.33 RCW.
Potential Tax Liability - Length of Time in Classification
When land is classified as either farm and agricultural land, open space, or timberland, it shall not be applied to any other use for a period of not less than ten years, unless transferred or reclassified into another current use classification, or an early withdrawal penalty will apply. The land continues in current use classification after the ten year period until a withdrawal request is made by the owner, the use of land no longer complies, or the ownership has changed and the new owner has not signed a Notice of Continuance. The notice of classification is recorded with the County Auditor in the same manner as the recording of state tax liens on real property.
Sale of Classified Land
When classified land is sold, the seller or transferor becomes liable at the time of sale for the additional tax, interest, and penalty unless the new owner(s) signs the Notice of Continuance which is attached to or shown on the excise tax affidavit. The County Auditor shall not accept an instrument of conveyance on any classified land unless the Notice of Continuance has been signed or the additional tax had been paid. The Assessor shall determine if the land qualifies for continued classification.
Owner May Request Withdrawal
If the owner intends to withdraw all or a portion of the land from classification after ten years, two years prior notice must be given to County Assessor. This notice can be filed after the eighth assessment year of the initial ten year classification period. If a portion of a parcel is removed from classification, the remaining portion must meet the requirements of the original classification unless the remaining parcel has different income criteria.
Action on Withdrawal
Upon receipt of a withdrawal request, the Assessor shall notify the legislative authority, which originally approved the classification and, when two years have elapsed; the Assessor shall withdraw the land from classification. The land which is withdrawn from classification shall be subject to an additional tax equal to the difference between the amount of tax paid under the classification and the tax at true and fair value for the last seven years, plus interest at the statutory rate charged on delinquent property taxes.
Owner to Notify Assessor of Change in Use
An owner changing the use of land from a classified use must notify the County Assessor within sixty days of this action. The Assessor shall remove the land from classified status and impose an additional tax equal to the difference between the tax paid on current use value and the tax that would have been paid on that land had it not been so classified, payable for the last seven years, plus interest at the same rate as charged on delinquent property taxes, plus a penalty of twenty % of the total amount.
Taxes Allocated to Portion of Year
Assessed valuation before and after removal of classification shall be listed and allocated according to that part of the year to which each assessed valuation applies.
Criteria for Classification Continues to Apply After Classification Has Been Granted
The owner of classified land must continue to meet the criteria established for classification or the Assessor may remove the land from the current use classification.
After giving the owner written notice and an opportunity to be heard, the Assessor may determine that all or a portion of the land no longer meets the criteria for classification.
Removal of Land Classification by County Assessor May be Appealed
Within thirty days after the removal from classification, the Assessor shall notify the owner in writing explaining the reasons for removal. The owner has thirty days following the date the notice was mailed by the Assessor to file an appeal of the removal of classification to the County Board of Equalization.
Additional Tax Due
At the time land is removed from classification it becomes subject to any additional tax, applicable interest, and a penalty which shall be due and payable to the County Treasurer within thirty days after the owner is notified. The penalty is not imposed if the removal satisfies the ten year requirement.
Lien of Taxes
Any additional tax, applicable interest, and penalty, becomes a lien on the land at the time the land is removed from classification. This lien shall have priority over any other encumbrance on the land. Such lien may be foreclosed upon expiration of the same period after delinquency in the same manner as delinquent real property taxes.
Distribution of Additional Taxes
Upon collection, the additional tax shall be distributed by the County Treasurer in the same manner in which current taxes applicable to the subject land are distributed.
When Removal of Land is Not Subject to Additional Tax
The additional tax, applicable interest, and penalty shall not be imposed if the removal of classification results solely from:
- Acquisition of property interests by State Agencies or Agencies or organizations qualified under RCW 84.34.210 and 64.04.130 (RCW 84.34.108(5f))
- The land is transferred to a government entity in exchange for other land located in the State of Washington
- Land taken through the exercise of the power of an eminent domain, or sale or transferred in anticipation of the exercise of such power was received in writing or by other official action
- A natural disaster changes the use of such land
- Official action by the State, County, or City disallows the present use of such land
- Removal of land classified as farm and agricultural land on which housing for employees and or principal place of residence is sited
- Transfer of land to a church when such land would qualify for exemptions granted thereto
Transfers Between Classifications and Reclassifications
Land may be reclassified, upon request by the owner, subject to all applicable qualifications for each classification, without additional tax, interest, or penalty for the following:
- Land classified as either farm and agricultural, timberland, or forestland under chapter 84.33 RCW may be reclassified to open space land
- Land classified as farm and agricultural land may be reclassified to timberland; timberland may be reclassified to farm and agricultural land
- Land classified as farm and agricultural land or timberland may be reclassified to forestland under chapter 84.33 RCW
- Land previously classified as farm and agricultural land may be reclassified to open space land as farm and agricultural conservation land and reclassified back to farm and agricultural land classification
The application for transfer from classified or designated forestland to a current use classification must be made within 30 days from the date of removal from forestland status.
Reclassification approvals are acted on in the same manner as approvals for classification. The County Assessor approves all applications for farm and agricultural classifications and reclassifications. The granting authority approves all land classifications or reclassifications for timberland or open space land. Land being reclassified into farm and agricultural land classifications or less than 20 acres from open space "farm and agricultural conservation land", timberland, or forest land may have the income requirements deferred for a period of up to five years from the date of the reclassification.
When Land is Valued at Current Use
Land which is classified as open space, farm and agricultural, or timberland shall be assessed at its current use value and placed on the assessment rolls in the year following the year of application.
Taxes upon classified land shall be due and payable in the year following the year the land was valued at its current use and placed on the assessment rolls.
The county legislative authority shall appoint a five-member committee representing the active farming community within the county. The committee shall advise the Assessor in the assessment of farm and agricultural land, and timberland.
Assessor May Require Data
The Assessor may require the owner of classified land to submit data regarding the use of the land, the productivity of typical crops, income and expense data, and similar information regarding continued eligibility.
Complete information concerning the requirements and the manner for accepting applications for current use reclassification and assessments are available at the Grant County Assessor's Office 509-754-2011, ext. 2683. It is helpful to read the complete law (Chapter 84.33 and 84.34 RCW) and rules (Chapter 458-30 WAC) to understand the requirements of the classifications and the tax liabilities incurred.